Monday, October 11, 2010

Thank you, NACA!

The following is my report on my progress through the NACA mortgage assistance event, including the steps involved and my happy results at the end.

I bought my piece of California five and a half years ago when the market was at the peak just before the fall. I love my bungalow. It's an Arts & Crafts 2 bed/1 bath in downtown Sacramento that had been flipped. I was able to get a house that was in my price limit that was walking distance to stores, banks, and my job, everything I needed so that I would not have to have a lot of car costs. It’s a perfect house to rent out should I ever get married or move.  I bought it with the full knowledge that I was buying an interest only loan, manipulated in a way to get me into the house, with a first and a second. But I figured that the key was to get into the property and then in five years refinance it. Then the market took a dive.

I’ve lost a third of the value of my house and so I am upside down like so many others.  Therefore, I have no equity in my house and can’t refinance. Luckily the interest rates went down so that when my rate on the first adjusted,  my payments actually went down. Great for now, but I wanted to get the rate fixed. After all, I can pay my mortgage now, but would be in trouble when the rates start to climb again. Meanwhile, my second’s interest rate had risen. 

My mortgages had been from Countrywide and ended up being taken over by Bank of America. For a year in advance of my adjustment I had started calling to try to fix my rate. But we all know that the greedy banks have no interest in talking to you, especially if you are actually paying them like a good person. But it is luck of who answers the phone and one day I finally got an agent to say I did seem to qualify for the Making Home Affordable consideration since two thirds of my pay was going to mortgage. Long story shortened, for the last eight months I’ve been on the phones dealing with an inept bureaucracy that has been frustrating and brought me to the verge of tears several times. I’m sure many of you can relate. I was getting nowhere. 

Last week I saw that NACA was in Los Angeles and thousands of homeowners were lined up looking for mortgage help. NACA is the Neighborhood Assistance Corporation of America, a non-profit group that assists homeowners to work with the lenders to come to mortgage agreements so people can keep their homes. Then NACA came to Sacramento starting on Friday. I was wary of going after I had seen the news about L.A. but on Friday night I saw that we were nowhere near as bad as the Los Angeles crowds. The news said that 25% of people get modifications on the spot and 80% of people leaving with some sort of positive result. Add the fact that I would be face to face with decision making bank representatives and I figured this was my best chance to get my modification. You see, I had a goal to get this mod done while my paychecks still reflected the 15% reduction due to our furlough.

Saturday morning I got up at 5 and to Cal Expo by 6. I was immediately disgusted that they were collecting $10 to park when this is supposed to help financially struggling people. Then I entered to see that the lot was filled wit a lot of cars and evidence that people were sleeping in many of them. I made my way to a lengthy line forming outside and was told to go to the first tent for orientation.

Orientation

At orientation they go over what NACA is and how they hope to help you. About halfway through I left to go get into the counseling line. Bad idea. Turns out they handed out the numbers to you at the end of the orientation. So stay for the whole thing.

Counseling

Now starts the longest wait of the whole process. Even though the counselors work 24/7, the line takes HOURS to wait in and when the shift changes at around 4, there are a lot less night operators on and so the line goes even slower. You can easily expect to wait 12-18 hours for this stage alone.  As you get close to the counseling you will have your documents scanned into the system. You need to have your paycheck, mortgage statement, property tax  and homeowner’s insurance forms. If you have other considerations like bankruptcy, foreclosure notices, etc., you’ll need those too. After your items are scanned you just wait to be called to an open counselor phone. I was lucky. I got my counselor on my line within five minutes. Others sat on hold for half an hour or more. The counselor looks at all your stuff, asks you questions, and rearranges your budget in a way that will hopefully work to your best advantage for the lender to help you out. This was where I knew I was on the borderline. I can pay my mortgage and live OK, but I barely have any extra funds and any little extra has to go on the credit card (like my dental crown this summer). As I said, I was just trying to fix my rate so that in the future, as rates increased, I wouldn’t get into real trouble.  At the end of the counseling you get a printout of your budget and are cleared to talk to your bank.

Bankers

It’s another wait for the bank line. Unlike the counselors, the banks are only working from about 8 to 8 each day. NACA actually calls this step Servicing because it is with your loan servicer, usually a bank. All of the big banks had representatives there. Bank of America had a large group, thank goodness. Everyone gets sent to wait in their bank's servicing area. It is there that we were told that our loans are serviced by Bank of America (or your bank) but that the loan actually belongs to someone else – be it FannyMae, FreddieMac, FHA, or even a group of private investors who bought loan packages. As has become clear over the years, these loans can be considered gambling/speculation. They are taking the loans as investments. Either they make money off of your interest or they hope that you default and they get the house to sell again and make more money off of. Each owner organization has their own rules about how much they are willing to change and modify your loan. Some are nicer than others. 

In my case it turns out that both of my loans fell under private ownership. I sat down with Vickie for almost three hours as she quietly played with my numbers on both loans to get me the best deal that she could. We made pleasant chit chat when the computers were slow. She lives in North Carolina and was ending a two-week stint between the L.A. and Sacramento events. They put in long, 18-hour days to help all the thousands who attend. I was a bit nervous. I had plenty of income. Would they still work with me? There were constant testimonials of people who had their interest reduced to 2% or they were going to save $1200 a month. Would I get anything at all?

Success!

Yes! It took almost 24 total hours, but I got exactly what I wanted. My first went up a slight bit from 3.25 to 3.75% - but it was fixed! Then my second went down from 8.25% adjustable to 4% fixed. My total monthly payments are only about $150 lower a month, but they're fixed! I can relax in knowing it will never change! And one more bonus – I don’t have a November payment! So I can take my November pay and use it to pay off my credit card!

Volunteering – the well worth it secret

OK, so after reading this you decide that you are willing to put in to put in the long hours to get your loan modified. Volunteer! This only works if you see that the crowd is huge in front of you. If you are going to be waiting for at least 12 hours, isn’t better to be doing something instead of getting a sore ass on folding chairs? If you volunteer you will then get priority for scanning and the counselor phones.

My volunteering did make a difference. First of all, I got number 52796 and on Saturday they closed the doors to everyone over 52000 and told them to come back on Sunday.  I volunteered and had my 8 hour shift from 8 to 4. I ended up doing data entry. There’s also ushering, translating, scanning, and more. I was lucky because I got to sit and had a lot of down time as well. I took a nap during my 45 minute lunch. It wasn’t that bad. After our shift ended we got taken to wait for scanning. Problem is, the day shift was done and the night shift has less than half the number of counselors. Now the lines move at a crawl. I had hoped to be out in a couple of hours but ended my night, finally, at 10:00. My phone time with the counselor was an hour. I was lucky. Some people were on the phone for two hours. 

As I left I asked someone who was now at the front of the normal line (waiting to be scanned) what time they had gotten there. They had gotten there at around 6:30, so about the same time as I had. But here I was done, with a number that wasn’t even allowed in until Sunday, and they were still waiting to scan.

You don’t have to go directly to banking. You can come back later to get in the bank line. So I went home and slept and took Sunday off. I figured that maybe the bank line and overall attendance would be less on Monday. I woke up this morning at 4 and headed off to get in line. They made me pay another damn $10 in parking. I got in a decent spot in line even though I knew about half of the group was also BOA. I finally got called up, pretty quickly after the bankers started, to see Vickie at about 9:30 and was finally checked out at 1:00. 

So the lesson is: Yes, NACA helps people and yes, volunteering can be worth your while.  PART 2, months later.

My only thoughts: Why couldn’t phone agents at the banks be as helpful and efficient as this event was? Why would I have had to deal with a year or more worth of frustration trying to get my loan modified (and probably denied) when I was able to get it done over a weekend? Why must so many millions of people be put through this bullshit that the banks, Wall Street, and speculators created? Why?

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